Peers will debate the Civil Liability Bill on 24 April, which includes clauses that will alter the way the discount rate used to adjust the value of clinical negligence compensation payments is calculated.

Healthcare leaders have called on peers to back the bill to slow the rise in clinical negligence costs for the NHS - which rose to £1.7bn last year, double the figure at the start of the decade.

The cost of clinical negligence claims is a major factor behind a reported 50% rise in GP indemnity fees between 2010 and 2016.

Clinical negligence

Discount rate changes in the Civil Liability Bill alone 'would not address the ongoing trend in the rising cost of clinical negligence', but would be an important step, according to a letter to peers signed by healthcare leaders including BMA chair Dr Chaand Nagpaul, Family Doctor Association chair Dr Peter Swinyard and the chief executive of the NHS Confederation.

The change would partly reverse the government's 2017 decision to slash the discount rate from 2.5% to -0.75. Medico-legal organisations warned that the decision would more than double the cost of some multimillion-pound payouts, potentially adding huge sums to the annual cost of clinical negligence claims and further driving up indemnity fees for doctors.

But the new bill would allow the rate to be recalculated to reflect the fact that recipients of compensation payouts generally make 'low risk' investments with the money they receive - not 'very low risk' as the current figure assumes.

Lord Chancellor and Justice Secretary David Lidington said last year it was ‘difficult to provide an estimate’ of how exactly this would affect the discount rate, but suggested it would rise to 'in the region of 0% to 1%’.

Patient safety

BMA chair Dr Chaand Nagpaul said: 'The rising cost of clinical negligence claims is placing increasing financial pressure on the NHS at a time when the health service can ill afford it – but it’s important to note that costs have spiralled even though the quality and safety of patient care remains high.

'There must be a means by which appropriate compensation can be provided to patients harmed through clinical negligence, but the system should more accurately reflect the way in which most claimants choose to invest their compensation payments. This is why the BMA is joining other groups of health professionals in urging the government to reform the way awards are calculated.'

The letter sent to peers says: 'A wider programme of reforms is needed and we urge the government to be bold in introducing a strategic approach that would control legal costs, ensure fair compensation payments are based more closely on the needs of claimants as well as help to reduce incidents of harm from happening in the first place.'